IMPORTANT POINTS;There has been a delay of about 3 years- In considering condonation of delay one has to look at the nature of the duties, which the assessee has been carrying on, and the drastic change in law brought about by the introduction of the Explanation under Section 10(20)- The need for registration as a trust carrying on activities of charitable purposes arose only for reason of the exemption having been withdrawn-- The assessee which was enjoying exemption from income-tax from its inception was suddenly faced with the prospect of being made liable under the taxing statute-The Ports, all over the Country had been suddenly deprived of their exemption and had filed applications under Section 12AA with considerable delay-The explanation offered is satisfactory and the delay has to be necessarily condoned.

VINOD CHANDRAN, J.

1. The following questions arise from the order of the Income Tax Appellate Tribunal:-

(i) Whether in the facts and circumstances of the case, the Tribunal was correct, in having directed the Commissioner to condone the delay in filing the application for registration under Section 12A of the Income Tax Act, 1961 ('IT Act', for short) and also directing grant of registration Section 12A ?

(ii) Whether the Tribunal was correct in having entertained the additional ground of a deemed grant of registration under Section 12A especially when it was raised at the appellate stage?

An additional ground arises in the course of the pendency of the appeal by reason of another similarly situated assessee having been granted registration under Section 12A by orders of the Tribunal; which has been acceded to by the Department. This cannot be said to be a question arising from the order of the Tribunal.

(iii) Whether the Revenue could have continued prosecution of the instant appeal in the circumstances of the Revenue having acceded to a similar Major Port being registered under Section 12A under the orders of yet another Income Tax Appellate Tribunal; going by the dictum in (2004) 12 SCC 42 [Berger Paints India Ltd. v. Commissioner of Income Tax, Calcutta] ?

2. On facts, suffice it to notice that the assessee had been carrying on activities of a Port having been notified under the Indian Ports Act, 1908 by virtue of notification Nos.SRO 57, 58 and 59 dated 08.01.1952 issued by the Ministry of Transport, Government of India. Like other Ports in India, before 13.11.2002, the assessee herein was registered as a 'local authority' as defined under Section 3(31) of the General Clauses Act, 1897. By virtue of such registration prior to 2002, the assessee was also availing exemption from income-tax as a 'local authority' under Section 10(20) of the IT Act. When an Explanation was added under Section 10(20) by which 'local authority' was defined, the restricted meaning; took the assessee along with some others out of the definition of 'local authority' and hence, was then on exigible to tax under the IT Act.

3. The assessee then made an application to the Commissioner of Income Tax to register it as a charitable institution as defined under Section 2(15) of the IT Act. This was for the purpose of claiming exemption as a trust established for charitable purposes in respect of income derived from their properties/businesses as permissible under Section 11 of the IT Act. The Commissioner declined the prayer, and in appeal the Tribunal allowed the same. There is also an ancillary question insofar as the delay occasioned of about three years, from the date on which the definition of 'local authority' was amended and restricted. Whether the delay was condonable or not and whether there could be a deemed registration under Section 12A for reason of the delay in consideration by virtue of Section 12AA(2) of the IT Act.

4. In the present case, the application under Section 12AA was made on 09.06.2006 and the order was passed on 10.08.2007. Sub-section (2) of Section 12AA also mandates that the application shall be considered and the registration granted or refused before six months from the last date of the month in which the application was received. The Commissioner by Annexure-B order passed after fourteen months refused to grant the registration. The Commissioner, at the first instance, was of the opinion that there was no satisfactory explanation for the delay and what was stated was merely that the delay was not intentional. The assessee was again requested to explain the delay. In a further application, the major contention was that the delay was condoned in similar applications all over the country. The decisions relied on by the assessee were distinguished. The provisions of Section 12A was found to necessitate an application for registration before the expiry of one year from the date of creation of the trust or establishment of